Having more legal literacy in your business tool kit helps you squeeze out avoidable costs.  In today’s uncertain environment controling avoidable costs is more important than ever.

The law touches every aspect of business.  Identifying those touches and prioritizing them lets you make minor course corrections early in your decision making.  It can make the difference between hitting a bull’s eye or missing the mark altogether, between protecting business profits and preventing business meltdowns.  Sometimes it can be a simple as identifying what your confidential business informations is and taking the proper steps to protect it. 

To learn more about the small steps you can take to make the law a valuable and practical business partner listen to the replay of my interview with Alex Mandossian here.

This time the New York garment company who had previously engaged in publicity stunts went too far — they broadcast their poor grasp of legal literacy when they used a photo of a sitting president of the United States in a Times Square billboard ad to hawk their men’s outerwear.   

Sure, they contacted the AP photographer who took the photo of President Obama during his visit to the Great Wall of China inBadaling.  But according to the Associated Press, licensing the photo still requires obtaining the necessary clearances – in this case getting a model release from the President.  (To read the NY Times version of the story click here, the Washington Post version includes a picture of the billboard from a different angle.)

Pleading ignorance of the law, the garmet maker president said:

Is it a calculated risk?  Not being an attorney — I’m being, really, a designer, merchandiser guy in the apparel business — I would leave that to attorneys or whatever. 

Hmmm, a calculated risk.  Sure. 

Maybe they should take a hint from  Seinfeld’s George Costanza who discovered the hard way why not knowing right from wrong is more than a calculated risk.   

Ignorance of the law is a losing defense, so is saying the ad was placed in “good faith.”  You’d think that since Women’s Wear Daily, The New York Times, and the New York Post all refused to run a similar ad the company might want to know why.  But apparantly they’d rather beg for forgiveness than ask for permission.

Using someone’s photo in a commerical context implicates their right of publicity.  It requires some kind of basic a model release. 

A little bit of Legal Literacy can go a long way.

In preparing to rule in the recent two week trial that ended between online auction titan eBay and classified ad giant Craigslist, the presiding judge reportedly noted that any ruling he would make would not be a “grand slam home run” for either side. 

“I have an uncanny ability to make everyone unhappy,” he said as he was encouraging the parties to reach a mutually acceptable settlement on their own.  If they waited for his ruling, in what turned out to be largely a clash of corporate cultures, it would be “the second best way to do it,” he said.

Touché.

The next time around, a little more due diligence up front would help too, because how you conduct business is just as important as what business is conducted.  The expectations embodied in corporate culture can make a huge difference between the success and failure of a deal.

There was an interesting article in the New York Times recently titled “How Mindfulness Can Make for Better Doctors.”  The piece describes how time pressures and multi-tasking is causing burnout.

Burnout is problematical because it not only leads to dissatisfaction but also causes doctors to “depersonalize patients and treat them as objects rather than as individuals suffering from disease.”  Each task becomes an obstacle and one more step to endure in an endless stream of obstacles. 

Sadly, this mindset can cause doctors, or anyone for that matter, to exhibit less professionalism, less empathy, and a propensity to make mistakes because they just want to get the task over and be done with it, with little thought given to how the pieces all fit together.   Perhaps you know someone at your office who is suffering such symptoms. 

Anyhow, some doctors are discovering that being mindful can help turn the tide, improving both performance and job satisfaction.  They are even offering training on the subject.  Mindfulness allows us to focus on the forest instead of the little task-based trees. 

 ”Mindfulness allows us to be in a whole host of situations with a sense of equanimity,” according to one of the doctors interviewed for the Times article.  It allows you to work in your “zone,” working with purpose, in the present, and without judgment. Ironically, it is these purpose-based actions that make the task-based actions easier to execute.  You can take them more in stride.  

The article on mindfulness reminded me of Karl E. Weick’s work Managing the Unexpected a book I had found while researching my book, The Business Guide to Legal Literacy.  

Weick and co-author Kathleen M. Sutcliffe defined mindfulness as a combination of aptitude and attitude, a state of alertness that continuously assimilates information, recognizes the significance of small changes early, and mitigates potentially negative consequence. 

What does this have to do with legal literacy?

Well, some businesses are content to shrug their corporate shoulders and believe legal risk is an inevitable side effect of uncertainty that it simply can’t be controlled.  Yet some organizations, like hospitals and nuclear power plants realize that operational excellence is not optional.  It’s a continuous process.  They can’t afford to make mistakes, yet they operate in the same uncertain world that we do.  How do they cope? 

That’s exactly what Weick and Sutcliffe wanted to find out.   Among their research findings, they discovered that mindful organizations took pride in looking for interdependencies and noticing new things.  They were open to change and new information and generally speaking, they were all: 

• More preoccupied with failures than with successes.  They realized that achieving strategic goals was as much about knowing what not to do as it was about knowing what to do.  They took responsibility for their actions and did not play the blame game. 
• Reluctant to oversimplify.  They preferred to reconcile interdisciplinary perspectives without sacrificing important nuances.  They listened to all of the stakeholders. 
• Sensitive to operations and relationships within the value chain.  Management did not isolate itself. 
• Committed to resilience.  They bounced back from past errors by learning from past mistakes and developing knowledge. 
• Deferential to expertise.   

The research on mindfulness puts a dent into the “no risk, no gain” mentality that encourages the aggressive risk taking, such as the behaviors we’ve seen on Wall Street.  It also puts a dent into highly autocratic and political bureaucratic business cultures such as the bailed out U.S. car industry (see further my AllBusiness.com blog posting on how to create a change resistant business culture).  

Quite the contrary, the research on mindfulness shows that the only sustainable and reliable gain is based on sound decision making processes and a commitment to preserving the integrity of those processes.  Incorporating mindfulness in your governance, risk management, and compliance decisions is therefore a sure fire way to keep your business legal liabilities in check.

Copyright © 2009 Corporate M.O., LLC